MANAGERS ON MANAGEMENT:THERE'S only been one year in the history of the State that saw a decline in demand for electricity, and that was 1979 - the year the ESB committed itself to spending £1 billion building the Moneypoint coal-fired power station in Co Clare.
"There was outrage and consternation," recalls Pádraig McManus, ESB chief executive, who had joined the company six years earlier.
"Even before it was finished it was being described as a white elephant - whereas in fact it's been the bulwark of the electricity sector in Ireland ever since."
It's an object lesson, argues McManus, in why managers cannot afford to be deflected by economic swings from their companies' long-term strategic plans. "In the energy sector, for example, we build assets that last for 50 years and are in planning sometimes for as long as 25 years before that - and even during that 25 years of planning there are usually going to be two or three economic swings at least.
"The fact is that when you're in management you have two realities to deal with. The first is operational costs, which are an everyday issue, affected by the state of the economy and by access to money and the cost of money. And the second is long-term planning, which you cannot allow to be derailed by fluctuating economic cycles."
At no time since the Great Depression perhaps have those two realities been more at odds than today - and this time the ESB has just launched a € 22 billion strategy for the next 15 years. But McManus has learned the lesson of Moneypoint.
"People have been asking me if we're now going to park that strategy in view of the slowdown in the economy and the turmoil on the international markets and my answer is no, we're not. We may have to look at its scheduling because of the availability of funds and the cost of borrowing, but other than that it will go ahead."
The culture of the ESB has changed dramatically over the past decade. It has cut staff from 13,500 to the current 6,500, and is on its way towards a target of 5,800 over the next three or four years, all of which will be achieved through voluntary redundancies.
"Operational costs have to be driven in good times and in bad," observes McManus.
"We have a lot of people in their late 50s who were involved in the rebuilding of the network, an area in which we hadn't allowed any voluntary redundancies in the past because there was such a workload. But that's changing - and in terms of getting operational costs down, that's the next phase of our strategy." However, he does caution managers against cutting staff costs as a knee-jerk reaction to the downturn. And he's under no illusion as to how it works.
"When the economy is buoyant, managers are really attentive to their staff in terms of development, training and upskilling because they feel they're mobile. But as soon as the downturn happens, they tend to change their attitude and say, 'Well, these guys are going nowhere'. So the focus invariably shifts away from management development in terms of giving people new challenges - which is very short-sighted."
Next Week: Hayley Quinn of Swarovski petercluskey@yahoo.fr
Name:Pádraig McManus
Company: ESB
www.esb.ie
Job:chief executive
Management advice:Keep operational costs to the forefront, and dont be overly influenced by economic swings in terms of strategic planning.
